Hawkish statements from Fed Chair Janet Yellen and Vice Chair Stanley Fischer last week increased expectations before the jobs data that the USA central bank is closer to raising rates.
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By contrast, market-based forecasting tools, such as federal funds futures, imply a less-than 25 percent probability of the Fed hiking this month and just over 50 percent by December.
While North said he doesn’t expect to see any move on interest rates before the Fed’s December meeting, he noted the consumer has continued to be the bright spot in the economy, arguing continued strength there will hold up second-half growth.
The dollar was trading higher against a basket of currencies, while prices for US government bonds fell. US crude settled up $1.28, or 2.97 percent, at $44.44 a barrel.
Companies kept adding to payrolls in August while measures of slack in the labor market were little changed, signaling steady hiring in the face of lackluster global growth.
Republican presidential nominee Donald Trump’s campaign team said the jobs numbers were a sign of a disappointing economic performance tied to what a senior campaign adviser called “Clinton globalist policies”.
Economists, he said, had predicted an increase of 180,000 jobs. June and July delivered red-hot jobs growth and the latest revisions to those figures – an overlooked but critically important bit of news – resulted in a wash.
“As the labor market is close to full employment, a slowdown may very well be needed to avoid overheating and cause the Fed to tighten policy faster than expected”, Wells Fargo economist John Silvia wrote in a research note earlier this week.
The smaller-than-expected rise in payrolls also likely reflects difficulties adjusting the data for seasonal fluctuations related to school calendars.
“Even if Fed officials are suspicious, they will want to wait another couple of months to ensure the data does rebound in September and that August is revised higher”, said Capital Economics economist Paul Ashworth.
“We expect the labor market to reach full employment by early 2017 and to surpass it thereafter”, said Elad Pashtan, an economist at Goldman Sachs in NY.
Fed Chair Janet Yellen, who has had her sentiment for the progressive raising of rates held at bay by the jobs data. Average hourly earnings grew slightly, bringing the 12-month increase in wages to 2.4 percent – a modest gain that still keeps most workers ahead of inflation.
The average workweek last month decreased by 0.1 hour to 34.3 hours.
“As we head into Labor Day weekend, the August employment report shows that we’re continuing a steady recovery”, U.S. Labor Secretary Tom Perez said in a statement. Mortgage rates remain at historically low levels, however.
The 15-year fixed mortgage rate increased to 2.77 percent from 2.74 percent.
In the transportation and warehousing sector, a total of 14,900 jobs were added in August, with more than 4,000 of those in warehousing and storage. Leisure and hospitality added 29,000 jobs. Temporary help firms shed 3,100 positions.
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Government payrolls are forecast rising 2,000 in August, extending the streak of job gains in the public sector to four months.
